To whom may a certification of authority be issued?

To whom may a certification of authority be issued?

• A. To an insurer authorized to transact business in this state
• B. To any licensed agent
• C. To a policyholder
• D. To individuals only

Answer: (A)

A certification of authority is the official document that allows an insurer to transact insurance within a state. It is issued to the insurer itself after meeting regulatory requirements, confirming it is legally authorized to issue policies there. Because this authority pertains to the insurer’s ability to operate in the state, it isn’t granted to individual agents, policyholders, or “individuals only.” An insurer must have this authority to sell insurance; agents hold licenses to represent insurers, and policyholders purchase coverage, but neither receives the certification of authority.

A certification of authority is the official document that allows an insurer to transact insurance within a state. It is issued to the insurer itself after meeting regulatory requirements, confirming it is legally authorized to issue policies there. Because this authority pertains to the insurer’s ability to operate in the state, it isn’t granted to individual agents, policyholders, or “individuals only.” An insurer must have this authority to sell insurance; agents hold licenses to represent insurers, and policyholders purchase coverage, but neither receives the certification of authority.